On April 25, 2024, EPA finalized the first-ever power plant pollution standards for the existing U.S. coal fleet and newly proposed gas plants, with most covered plants required to cut their pollution by 90 percent by 2032. Together, these rules are estimated to curb over 1.4 billion metric tons of carbon pollution and create $270 billion in climate benefits and $120 billion in public health benefits.
In May 2023, EPA took a major step to reduce carbon pollution from power plants across the country through two vital rules. These rules would set carbon pollution standards for new fossil fuel power plants and existing power plants under Section 111 of the Clean Air Act.
The proposal would require most coal plants to reduce their carbon pollution by 90 percent by 2030—and require many gas plants to do the same by 2035. Certain plants that are planning to retire or run infrequently will face lower standards. Overall, this rule, once finalized, represents a substantial contribution toward reducing carbon pollution and avoiding the worst impacts of climate change.
This is a big deal: The power sector is the second-largest contributor to greenhouse gas pollution driving climate change, because a majority—about 60 percent—of our nation’s electricity still comes from coal- and gas-fired plants. Consequently, these rules are the Biden administration’s most significant opportunity to cut carbon pollution and build on the investments in the Inflation Reduction Act (IRA).
The power sector is the second-largest contributor to greenhouse gas pollution driving climate change.
This is key to hitting our science-based targets to halve climate pollution this decade and protecting Americans from the worst impacts of the climate crisis.
Recent modeling shows that the IRA could help achieve a 37-41 percent reduction in carbon pollution (below peak 2005 levels) by 2030. This represents critical progress, but it’s still shy of the science-based goal of cutting emissions by 50 percent. These power plant carbon rules, once finalized, would help get us close that gap and land within striking distance of meeting that target.
EPA has proposed two key rules. The first rule, under section 111(d) of the Clean Air Act, sets carbon pollution standards for existing fossil fuel power plants, which includes both coal and gas plants already in operation. The second rule, under section 111(b) of the Clean Air Act, sets standards for new gas plants, which have not yet been built. (There is also a third proposal, which officially overturns the Trump EPA’s do-nothing power plant rule, the Affordable Clean Energy Rule.)
These rules set specific limits on carbon pollution from these sources that utilities and states must achieve. To do so, EPA must identify a technology to base the standard on. This must be a technology that could be applied at the power plant (also known as inside the fenceline) and is “adequately demonstrated” and “cost-reasonable.” In the statute, this basis for the rules is known as the “best system of emission reduction” (BSER). For these rules, EPA has defined the BSER as carbon capture and sequestration for most sources.
These rules regulate carbon pollution from three sources: existing coal plants, existing gas plants, and new gas plants—with different requirements for each.
The rule for existing coal plants would require carbon pollution reductions of 90 percent by 2030—unless a plant commits to retire before 2040. The rule for existing gas plants covers only the largest plants that run at least half the time, requiring a 90 percent reduction in emissions by 2035 (or by 2038 if using hydrogen). EPA is taking comments on a future rule covering the majority of existing gas plants not addressed by this proposal.
For new gas plants, EPA would require baseload plants that run often to reduce their emissions 90 percent by 2035 (or 2038 if using hydrogen). For new intermediate and peaker plants that run less often, EPA is proposing less stringent standards based on partial hydrogen co-firing or energy efficiency.
It is important to note that these rules don’t require power plants to install carbon capture or any other technology—they just need to achieve the pollution reductions set out by EPA. For existing power plants, the Clean Air Act lets states determine how to achieve EPA’s pollution standards across the entire existing fleet. They will have two years after the rules are finalized to create State Implementation Plans to comply—followed by one year for EPA review and either approve or disapprove those plans. The rule for new sources creates pollution requirements that individual power plants will need to meet to receive a permit and power companies can choose to reduce pollution at the plant using other technologies or investment choices if they choose.
These rules represent a critical step forward in reducing carbon pollution from power plants. However, there are a few areas where the proposed rules must be strengthened.
The first area relates to compliance schedules. The proposal would not require full emissions reductions for gas plants until either 2035 or 2038, potentially allowing new gas plants to be built in the meantime with minimal abatement technology. This timeline must be tightened up before the rule is finalized. Similarly, the deadline by which a coal plant must commit to retire in order to avoid the rule's full requirements should be accelerated. The climate crisis demands urgent action, and these technologies are available now. EPA must therefore require power producers to reduce their emissions more quickly.
Second, the rules must apply more stringent carbon reduction requirements to a wider number of power plants. The proposal for existing gas plants, in particular, covers only the largest baseload plants (those over 300 megawatts) that run most frequently (greater than 50 percent “capacity factor”)—leaving too much gas plant pollution uncovered by this stringent standard. The number of gas plants covered by the strongest emissions standards must increase in the final rule to ensure these rules reduce carbon pollution at the scale and speed necessary to fulfill the EPA’s legal mandate to protect Americans’ public health and welfare.
Finally, the EPA and White House must ensure that communities have ample opportunity for engagement in both the rule design and its implementation and that any technologies used for compliance with the rule do not exacerbate longstanding environmental injustices. Particularly, if utilities or states chose to deploy carbon capture or hydrogen as mitigation technologies to meet these standards, impacted communities must have full information and ample opportunities to inform those compliance plans. We encourage the administration to continue coordinating across agencies and EPA offices to craft and enforce guardrails to ensure mitigation technologies do not exacerbate environmental injustices or local air pollution. We also look forward to working with federal agencies and states on robust compliance and enforcement plans.
EPA should work expeditiously to finalize both of these rules by March 2024. Since carbon dioxide pollution in the atmosphere is cumulative, the sooner these rules go into effect, the better. Furthermore, finalizing these rules no later than spring 2024 would ensure that a future Republican-controlled Congress could not use the Congressional Review Act to strike down these rules after the 2024 election. Time is of the essence.
These power plant carbon rules are just two among five priority power sector rules EPA currently is on track to finalize, in addition to three that remain delayed. For the past eight months, we’ve been following EPA’s progress on these critical rules, and since releasing our first report card in October 2022, EPA has made significant progress. However, there is still work to be done and a quickly dwindling window of opportunity to avoid a Congressional Review Act period that could leave these standards vulnerable to repeal. EPA must act expediently to put the most effective versions of these rules into effect.
